Get ready to pay more for home insurance

Homeowners across the state will pay more to insure their homes beginning in July.

The decision comes after a settlement between the N.C. Rate Bureau and the N.C. Department of Insurance.

Gaston County homeowners will see a 9.3 percent increase, and a 7.7 hike will apply to homeowners in Lincoln and Cleveland counties.

While the increases may sting a bit, the settlement warded off potentially greater fees.

Raising the rates

In October, insurance companies, represented by the N.C. Rate Bureau, requested an overall statewide average rate increase of 17.7 percent.

The state Department of Insurance was charged with deciding what was fair to insurers and policy holders.

“Homeowners’ insurance is a very complex issue. We face a great challenge in making sure that it is not only affordable, but available, to consumers across the state,” said Insurance Commissioner Wayne Goodwin.

Goodwin signed the settlement agreement Tuesday.

For a $150,000 home, Gaston County homeowners will pay about $45 extra annually. The owner of a $150,000 home in Lincoln and Cleveland counties will pay an extra $37 a year.

The initial request

In October, the N.C. Rate Bureau called for Gaston County homeowners to pay an increase of 9.4 percent.

Insurers asked for hikes of nearly 14 percent for neighboring Lincoln and Cleveland counties, according to the 1,200-page document that went to the state’s Department of Insurance.

At the time of the request, Director Ray Evans said higher rates weren’t expected to take effect before 2014. But the agreement signed Tuesday puts the new structure in place July 1.

The settlement saved policyholders $237 million, according to the state Insurance Department.

“I feel this settlement helps strike that balance, and I am pleased that the increase will be significantly smaller than what insurers originally requested,” said Goodwin.

Why the increase?

Insurers blame potential hurricane damage for that escalation.

Coastal counties face a higher increase, but hurricanes have proven they can travel farther inland and create more wind damage in regions situated far from the coast, according to Evans.

The higher rates are a response for “what we believe is increased potential for loss from hurricanes,” he said.

The last homeowners’ insurance rate filing occurred in 2008 when insurance companies requested a 19.5 percent statewide average increase. A settlement agreement allowed for a 4.05-percent average increase that went into effect statewide in May 2009.

You can reach reporter Diane Turbyfill at 704-869-1817 and twitter.com/GazetteDiane.

GastonCounty

$499

Homeowners’ insurance premium currently paid on a frame home worth $150,000.

$544

Homeowners’ insurance premium beginning July 1 on a frame home worth $150,000.

Lincoln and Cleveland counties

$480

Homeowners’ insurance premium currently paid on a frame home worth $150,000.

$517

Homeowners’ insurance premium beginning July 1 on a frame home worth $150,000.